09/11/2008 11:00PM

NYRA deal not all good news


NEW YORK - Almost a year to the day that the results of the race for the New York racing franchise were posted, the "Official" light was finally lit Friday. The New York Racing Association has signed over Aqueduct, Belmont, and Saratoga to the state of New York, in exchange for the right to operate those tracks for the next 25 years and $105 million that will allow it to emerge from bankruptcy.

It's essentially the same deal that then-Gov. Eliot Spitzer announced last September, that then-senate majority leader Joe Bruno spent all last autumn trying to derail, and that the legislature passed in June. It was the best option out there, certainly preferable to the disaster of selling the sport to one of the casino-linked profiteers that was bidding for it.

While NYRA supposedly will operate amid greater transparency and with greater oversight from the state, it will control the sport, appointing 14 of the company's 25 trustees, while the governor gets seven appointments and the state senate and assembly get two each. At least until 2033, a not-for-profit organization led by people who genuinely like and care about horse racing will continue to run the game.

That alone is worth two cheers, and it's understandable that NYRA officials were jubilant Friday, after years of being called corrupt and incompetent by Spitzer (who was forced to resign in a prostituion scandal), Bruno (who retired amid several ongoing ethics investigations), and former state comptroller Alan Hevesi (who was forced to resign for misappropriating state funds). During that time, NYRA was found to have done nothing worse than fail to police a low-level tax-evasion scheme by a handful of mutuel clerks. Everything else was grandstanding by politicians looking to enhance their reputations and by entrepreneurs who hoped to put the tracks and their gambling licenses into private hands.

It's premature to give the whole matter a full three cheers, however, because the people who are supposed to be the ultimate beneficiaries of it all, the public and the customers, have as yet gotten nothing. In fact, before the champagne has gone flat from Friday's cork-poppings at NYRA, New York's horseplayers will be getting a smack in the head starting Wednesday, when the takeout on New York racing is being raised 1 percent for no good reason. NYRA opposed the increase, which was promoted by the state's six offtrack betting corporations. But the bottom line is that the $30 million NYRA is getting from the state (in addition to the $75 million to satisfy its creditors) is precisely the same amount - 1 percent of an annual $3 billion handle - that the citizens betting on its races will have taken away from their winning bets in the next 12 months.

People who bet trifectas, superfectas, pick fours, and pick sixes in New York will be facing a 26 percent takeout starting Wednesday, the highest rates ever imposed in New York racing history. And people wonder why sports betting (4.54 percent takeout), roulette wheels (5.26 percent), and slot machines (8 percent to 12 percent) have been traditionally thriving while racing handle stagnates.

In California and Kentucky, the two other biggest racing states, the pools where the New York takeout is jumping from 25 percent to 26 percent are taxed at 19 percent to 20 percent. Yet New York politicians, led by the state senate's standing committee on racing and wagering, continues to insist - as it has done in its last three annual reports - that New York's takeout is low in comparison to other racing states.

Missing from Friday's announcement was any indication of progress, much less a timetable, for resuming construction of the Aqueduct racino that voters approved seven years ago. That's the real moneymaker looking ahead, capable of pushing New York's racing purses so high that the stable areas and entry box will be overflowing, leading to full fields of high-quality races that in theory would make usurious takeout rates less painful. Unfortunately, each year of delay means that competing slot parlors are springing up everywhere else, and by the time Aqueduct does become New York City's only casino, the riches expected from that monopoly may no longer be there.

At least now that the whole franchise-renewal process is officially over, NYRA can turn its attention to improving its racing and facilities, both of which have declined during nearly a decade of ugly and all-consuming politicking. The remaining fan base has been patient and forgiving, but it's about one more takeout increase away from saying sayonara just as a golden age might otherwise be beginning.